MELBOURNE- Oil prices fell on Monday, extending losses from Friday after the US dollar jumped to a three-week high and the US rig count rose, although nearly a quarter of US Gulf of Mexico output remained offline in the wake of two hurricanes.
US West Texas Intermediate (WTI) crude futures fell 30 cents, or 0.4 percent, to $71.67 a barrel after declining by 64 cents on Friday.
Brent crude futures fell 27 cents, or 0.4 percent, to $75.07 a barrel after losing 33 cents on Friday.
Oil fell with the greenback near a three-week high following a rally on Friday on better-than-expected US retail sales data. That bolstered expectations the US Federal Reserve will begin reducing asset purchases later this year.
“WTI crude may consolidate over the next few trading sessions until the trajectory of the dollar is a little clearer,” OANDA analyst Edward Moya said in a note.
A stronger greenback makes US dollar-priced oil more expensive for holders of other currencies, curtailing demand.
A rise in the US rig count also kept a lid on oil prices. The oil and gas rig count rose by nine to 512 in the week to Sept. 17, its highest since April 2020 and double the level from this time last year, Baker Hughes said on Friday.
As of Friday, 23 percent of US Gulf of Mexico crude output, or 422,078 barrels per day, remained shut, the Bureau of Safety and Environmental Enforcement reported.
Saudi Arabia, the world’s biggest oil exporter, kept its ranking as China’s top crude supplier for a ninth straight month in August as major producers relaxed production cuts.
Saudi oil arrivals surged 53 percent from a year earlier to 8.06 million tons, or 1.96 million barrels per day (bpd), data from the General Administration of Customs showed on Monday.
That compares with 1.58 million bpd in July and 1.24 million bpd in August last year.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, decided in July to ease production cuts and increase supply by a further 2 million bpd, adding 0.4 million bpd a month from August until December. In July, OPEC output increased by 640,000 bpd to 26.66 million bpd.
China’s crude oil imports from Russia stood at 6.53 million tons in August, or 1.59 million bpd, flat versus 1.56 million bpd in July.
The big gap behind Saudi volumes was due to Beijing’s decision to slash crude oil import quotas to its independent refiners, who favor Russia’s ESPO blend. – Reuters
